Attached files
| file | filename |
|---|---|
| 8-K - 8-K - Huntsman CORP | a14-21893_18k.htm |
| EX-99.1 - EX-99.1 - Huntsman CORP | a14-21893_1ex99d1.htm |
| EX-99.4 - EX-99.4 - Huntsman CORP | a14-21893_1ex99d4.htm |
| EX-10.1 - EX-10.1 - Huntsman CORP | a14-21893_1ex10d1.htm |
| EX-99.5 - EX-99.5 - Huntsman CORP | a14-21893_1ex99d5.htm |
| EX-23.1 - EX-23.1 - Huntsman CORP | a14-21893_1ex23d1.htm |
| EX-99.2 - EX-99.2 - Huntsman CORP | a14-21893_1ex99d2.htm |
Exhibit 99.3
UNAUDITED PRO FORMA CONDENSED COMBINED CONSOLIDATED FINANCIAL STATEMENTS
On October 1, 2014, Huntsman Corporation (“Huntsman” or the “Company”) through its direct subsidiary Huntsman International LLC, completed the acquisition of the Titanium Dioxide Pigments and Other Businesses of Rockwood Holdings, Inc. for $1,039 million in cash.
The following unaudited pro forma condensed combined consolidated financial statements have been derived by the application of unaudited pro forma adjustments to the Company’s historical consolidated financial statements. The unaudited pro forma condensed combined consolidated balance sheet as of June 30, 2014 for Huntsman and the Titanium Dioxide Pigments and Other Businesses of Rockwood Holdings, Inc. is presented as if the acquisition had occurred on June 30, 2014. The unaudited pro forma condensed combined consolidated statements of operations of Huntsman and the Titanium Dioxide Pigments and Other Businesses of Rockwood Holdings, Inc. for the six months ended June 30, 2014 and for the year ended December 31, 2013 are presented as if the acquisition had occurred on January 1, 2013. The unaudited pro forma condensed combined consolidated financial statements are being provided for illustrative purposes only and do not purport to represent what our results of operations or financial position would have been if the transaction had occurred on the dates indicated and are not intended to project our results of operations or financial position for any future period. Any of the factors underlying these estimates and assumptions may change or prove to be materially different and the estimates and assumptions may not be representative of facts existing upon finalization of the acquisition.
The acquisition has been accounted for using the acquisition method of accounting. Under the acquisition method of accounting, the total acquisition price presented in the accompanying unaudited pro forma condensed combined consolidated financial statements has been preliminarily allocated to the assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date. The unaudited pro forma condensed combined consolidated financial statements contained herein do not reflect the costs of any integration activities or benefits that may result from realization of future cost savings from operating efficiencies, or any revenue, tax, or other synergies that may result from the acquisition.
The unaudited pro forma adjustments are based on estimates, available information and certain assumptions that the Company believes are reasonable. The unaudited pro forma adjustments and primary assumptions are described in the accompanying notes. The unaudited pro forma condensed combined consolidated financial statements and the related notes should be read in conjunction with the financial statements and the accompanying notes of the Titanium Dioxide Pigments and Other Businesses of Rockwood Holdings, Inc. included in Exhibit 99.1 and 99.2 of this Current Report on Form 8-K for the year ended December 31, 2013 and for the six months ended June 30, 2014 and 2013, respectively, and the historical consolidated financial statements and accompanying notes of Huntsman Corporation included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013 and the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2014.
Unaudited Pro Forma Condensed Combined Consolidated Balance Sheet
Huntsman Corporation and
Titanium Dioxide Pigments and Other Businesses of Rockwood Holdings, Inc.
As of June 30, 2014
(in millions of dollars)
|
|
|
|
|
Titanium Dioxide Pigments |
|
|
|
|
|
|
| ||||
|
|
|
|
|
and Other Businesses |
|
Pro Forma |
|
|
|
Pro Forma |
| ||||
|
|
|
Huntsman Corporation |
|
of Rockwood Holdings, Inc. |
|
Adjustments (1) |
|
Notes |
|
Combined |
| ||||
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
| ||||
|
Current Assets: |
|
|
|
|
|
|
|
|
|
|
| ||||
|
Cash and restricted cash |
|
$ |
412.0 |
|
$ |
30.3 |
|
$ |
37.9 |
|
(a) |
|
$ |
480.2 |
|
|
Accounts receivable, net |
|
1,870.0 |
|
247.5 |
|
|
|
|
|
2,117.5 |
| ||||
|
Inventories |
|
1,847.0 |
|
449.2 |
|
35.9 |
|
(b) |
|
2,332.1 |
| ||||
|
Deferred income taxes |
|
53.0 |
|
1.5 |
|
(1.5 |
) |
(c) |
|
53.0 |
| ||||
|
Prepaid expenses and other current assets |
|
266.0 |
|
31.0 |
|
|
|
|
|
297.0 |
| ||||
|
Total current assets |
|
4,448.0 |
|
759.5 |
|
72.3 |
|
|
|
5,279.8 |
| ||||
|
Property, plant and equipment, net |
|
3,776.0 |
|
788.5 |
|
(365.1 |
) |
(d) |
|
4,199.4 |
| ||||
|
Intangible assets, net |
|
75.0 |
|
188.2 |
|
|
|
|
|
263.2 |
| ||||
|
Goodwill |
|
130.0 |
|
— |
|
|
|
|
|
130.0 |
| ||||
|
Investment in unconsolidated affiliates |
|
290.0 |
|
— |
|
|
|
|
|
290.0 |
| ||||
|
Deferred income taxes |
|
240.0 |
|
61.3 |
|
44.7 |
|
(c) |
|
346.0 |
| ||||
|
Other noncurrent assets |
|
483.0 |
|
9.2 |
|
|
|
|
|
492.2 |
| ||||
|
Total assets |
|
$ |
9,442.0 |
|
$ |
1,806.7 |
|
$ |
(248.1 |
) |
|
|
$ |
11,000.6 |
|
|
LIABILITIES |
|
|
|
|
|
|
|
|
|
|
| ||||
|
Current liabilities: |
|
|
|
|
|
|
|
|
|
|
| ||||
|
Accounts payable |
|
$ |
1,162.0 |
|
$ |
154.1 |
|
|
|
|
|
$ |
1,316.1 |
| |
|
Accrued liabilities |
|
682.0 |
|
90.1 |
|
|
|
|
|
772.1 |
| ||||
|
Deferred income taxes |
|
43.0 |
|
3.0 |
|
$ |
(3.0 |
) |
(c) |
|
43.0 |
| |||
|
Notes payable and long-term debt, current portion |
|
257.0 |
|
1.9 |
|
|
|
|
|
258.9 |
| ||||
|
Total current liabilities |
|
2,144.0 |
|
249.1 |
|
(3.0 |
) |
|
|
2,390.1 |
| ||||
|
Long-term debt |
|
3,814.0 |
|
3.5 |
|
1,039.0 |
|
(e) |
|
4,856.5 |
| ||||
|
Deferred income taxes |
|
270.0 |
|
17.8 |
|
(17.8 |
) |
(c) |
|
270.0 |
| ||||
|
Other liabilities |
|
906.0 |
|
236.1 |
|
33.9 |
|
(f) |
|
1,176.0 |
| ||||
|
Total liabilities |
|
7,134.0 |
|
506.5 |
|
1,052.1 |
|
|
|
8,692.6 |
| ||||
|
EQUITY |
|
|
|
|
|
|
|
|
|
|
| ||||
|
Total equity |
|
2,308.0 |
|
1,300.2 |
|
(1,300.2 |
) |
(g) |
|
2,308.0 |
| ||||
|
Total liabilities and equity |
|
$ |
9,442.0 |
|
$ |
1,806.7 |
|
$ |
(248.1 |
) |
|
|
$ |
11,000.6 |
|
Unaudited Pro Forma Condensed Combined Consolidated Statement of Operations
Huntsman Corporation and
Titanium Dioxide Pigments and Other Businesses of Rockwood Holdings, Inc.
For the Year Ended December 31, 2013
(in millions of dollars)
|
|
|
|
|
Titanium Dioxide Pigments |
|
|
|
|
|
|
| ||||
|
|
|
|
|
and Other Businesses |
|
Pro Forma |
|
|
|
Pro Forma |
| ||||
|
|
|
Huntsman Corporation |
|
of Rockwood Holdings, Inc. |
|
Adjustments (1) |
|
Notes |
|
Combined |
| ||||
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
| ||||
|
Trade sales, services and fees, net |
|
$ |
10,847.0 |
|
$ |
1,607.6 |
|
$ |
(88.0 |
) |
(h) |
|
$ |
12,366.6 |
|
|
Related party sales |
|
232.0 |
|
— |
|
|
|
|
|
232.0 |
| ||||
|
Total revenues |
|
11,079.0 |
|
1,607.6 |
|
(88.0 |
) |
|
|
12,598.6 |
| ||||
|
Cost of goods sold |
|
9,326.0 |
|
1,466.8 |
|
(100.4 |
) |
(h) (i) |
|
10,692.4 |
| ||||
|
Gross profit |
|
1,753.0 |
|
140.8 |
|
12.4 |
|
|
|
1,906.2 |
| ||||
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
| ||||
|
Selling, general and administrative |
|
942.0 |
|
180.8 |
|
(25.0 |
) |
(h) (j) (k) |
|
1,097.8 |
| ||||
|
Research and development |
|
140.0 |
|
— |
|
15.6 |
|
(k) |
|
155.6 |
| ||||
|
Other operating expense |
|
10.0 |
|
— |
|
|
|
|
|
10.0 |
| ||||
|
Restructuring, impairment and plant closing costs |
|
151.0 |
|
2.2 |
|
|
|
|
|
153.2 |
| ||||
|
Total operating expenses |
|
1,243.0 |
|
183.0 |
|
(9.4 |
) |
|
|
1,416.6 |
| ||||
|
Operating income (expense) |
|
510.0 |
|
(42.2 |
) |
21.8 |
|
|
|
489.6 |
| ||||
|
Interest expense |
|
(190.0 |
) |
(5.8 |
) |
(39.0 |
) |
(l) |
|
(234.8 |
) | ||||
|
Equity in income of investment in unconsolidated affiliates |
|
8.0 |
|
— |
|
|
|
|
|
8.0 |
| ||||
|
Loss on early extinguishment of debt |
|
(51.0 |
) |
(17.2 |
) |
|
|
|
|
(68.2 |
) | ||||
|
Other income (loss) |
|
2.0 |
|
(0.7 |
) |
|
|
|
|
1.3 |
| ||||
|
Income (loss) from continuing operations before income taxes |
|
279.0 |
|
(65.9 |
) |
(17.2 |
) |
|
|
195.9 |
| ||||
|
Income tax (expense) benefit |
|
(125.0 |
) |
11.6 |
|
6.0 |
|
(m) |
|
(107.4 |
) | ||||
|
Income (loss) from continuing operations |
|
$ |
154.0 |
|
$ |
(54.3 |
) |
$ |
(11.2 |
) |
|
|
$ |
88.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Income from continuing operations per share attributable to Huntsman Corporation: |
|
|
|
|
|
|
|
|
|
|
| ||||
|
Basic |
|
$ |
0.55 |
|
|
|
|
|
|
|
$ |
0.28 |
| ||
|
Diluted |
|
$ |
0.55 |
|
|
|
|
|
|
|
$ |
0.27 |
| ||
Unaudited Pro Forma Condensed Combined Consolidated Statement of Operations
Huntsman Corporation and
Titanium Dioxide Pigments and Other Businesses of Rockwood Holdings, Inc.
For the Six Months Ended June 30, 2014
(in millions of dollars)
|
|
|
|
|
Titanium Dioxide Pigments |
|
|
|
|
|
|
| ||||
|
|
|
|
|
and Other Businesses |
|
Pro Forma |
|
|
|
Pro Forma |
| ||||
|
|
|
Huntsman Corporation |
|
of Rockwood Holdings, Inc. |
|
Adjustments (1) |
|
Notes |
|
Combined |
| ||||
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
| ||||
|
Trade sales, services and fees, net |
|
$ |
5,614.0 |
|
$ |
833.5 |
|
$ |
(48.0 |
) |
(h) |
|
$ |
6,399.5 |
|
|
Related party sales |
|
129.0 |
|
— |
|
|
|
|
|
129.0 |
| ||||
|
Total revenues |
|
5,743.0 |
|
833.5 |
|
(48.0 |
) |
|
|
6,528.5 |
| ||||
|
Cost of goods sold |
|
4,788.0 |
|
707.5 |
|
(61.0 |
) |
(h) (i) |
|
5,434.5 |
| ||||
|
Gross profit |
|
955.0 |
|
126.0 |
|
13.0 |
|
|
|
1,094.0 |
| ||||
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
| ||||
|
Selling, general and administrative |
|
473.0 |
|
101.6 |
|
(21.3 |
) |
(h) (j) (k) |
|
553.3 |
| ||||
|
Research and development |
|
73.0 |
|
— |
|
9.1 |
|
(k) |
|
82.1 |
| ||||
|
Other operating income |
|
(9.0 |
) |
— |
|
|
|
|
|
(9.0 |
) | ||||
|
Restructuring, impairment and plant closing costs |
|
52.0 |
|
0.1 |
|
|
|
|
|
52.1 |
| ||||
|
Total operating expenses |
|
589.0 |
|
101.7 |
|
(12.2 |
) |
|
|
678.5 |
| ||||
|
Operating income |
|
366.0 |
|
24.3 |
|
25.2 |
|
|
|
415.5 |
| ||||
|
Interest (expense) income |
|
(99.0 |
) |
1.3 |
|
(19.5 |
) |
(l) |
|
(117.2 |
) | ||||
|
Equity in income of investment in unconsolidated affiliates |
|
4.0 |
|
— |
|
|
|
|
|
4.0 |
| ||||
|
Other income (expense) |
|
1.0 |
|
(0.2 |
) |
|
|
|
|
0.8 |
| ||||
|
Income from continuing operations before income taxes |
|
272.0 |
|
25.4 |
|
5.7 |
|
|
|
303.1 |
| ||||
|
Income tax expense |
|
(79.0 |
) |
(13.9 |
) |
(2.0 |
) |
(m) |
|
(94.9 |
) | ||||
|
Income from continuing operations |
|
$ |
193.0 |
|
$ |
11.5 |
|
$ |
3.7 |
|
|
|
$ |
208.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Income from continuing operations per share attributable to Huntsman Corporation: |
|
|
|
|
|
|
|
|
|
|
| ||||
|
Basic |
|
$ |
0.75 |
|
|
|
|
|
|
|
$ |
0.80 |
| ||
|
Diluted |
|
$ |
0.74 |
|
|
|
|
|
|
|
$ |
0.79 |
| ||
Pro Forma Adjustments Explanatory Notes
Huntsman Corporation and
Titanium Dioxide Pigments and Other Businesses of Rockwood Holdings, Inc.
(1) The preliminary acquisition price allocation for the Titanium Dioxide Pigments and Other Businesses of Rockwood Holdings, Inc. is based on estimates, assumptions, and valuations which have not yet been finalized. Accordingly, the pro forma adjustments to allocate the acquisition consideration will remain preliminary until Huntsman management determines the fair values of assets acquired, net of liabilities assumed. The final amounts allocated to assets acquired and liabilities assumed could differ materially from the amounts presented in the unaudited pro forma condensed combined consolidated financial statements. The preliminary amounts allocated to the net assets acquired and liabilities assumed are based on Huntsman management’s current best estimates. The final acquisition price allocation may result in different allocations for tangible and intangible assets than presented in the unaudited pro forma condensed combined consolidated financial statements and these notes, and those differences may be material.
The following table summarizes the preliminary allocation of the aggregate cash acquisition price of $1,039 million:
|
Preliminary Acquisition Price Allocation (in millions) |
|
|
| |
|
Cash |
|
$ |
68.2 |
|
|
Accounts receivable, net |
|
247.5 |
| |
|
Inventories |
|
485.1 |
| |
|
Prepaid expenses and other current assets |
|
31.0 |
| |
|
Property, plant and equipment, net |
|
423.4 |
| |
|
Intangible assets, net |
|
188.2 |
| |
|
Deferred income taxes, non-current |
|
106.0 |
| |
|
Other assets |
|
9.2 |
| |
|
Total assets acquired |
|
1,558.6 |
| |
|
Accounts payable |
|
154.1 |
| |
|
Accrued compensation |
|
44.7 |
| |
|
Accured expenses and other current liabilities |
|
45.4 |
| |
|
Long-term debt, current |
|
1.9 |
| |
|
Long-term debt, non-current |
|
3.5 |
| |
|
Pension and related liabilities |
|
240.0 |
| |
|
Other liabilities |
|
30.0 |
| |
|
Total liabilities assumed |
|
519.6 |
| |
|
Total Acquisition Price |
|
$ |
1,039.0 |
|
|
Balance Sheet: | ||
|
(a) |
|
To record incremental cash acquired. |
|
|
|
|
|
(b) |
|
To adjust inventory to estimated preliminary fair value. |
|
|
|
|
|
(c) |
|
To record estimated preliminary deferred tax assets related to the acquisition. |
|
|
|
|
|
(d) |
|
To record a step-down in value to estimated preliminary fair value of long-lived assets. |
|
|
|
|
|
(e) |
|
To reflect the acquisition cost as combined debt. |
|
|
|
|
|
(f) |
|
To adjust the accrued pension obligation to estimated preliminary fair value. |
|
|
|
|
|
(g) |
|
To eliminate equity of the Titanium Dioxide Pigments and Other Businesses of Rockwood Holdings, Inc. |
|
|
|
|
|
Income Statement: | ||
|
(h) |
|
In order to gain approval from the European Commission for the acquisition of the Titanium Dioxide Pigments and Other Businesses of Rockwood Holdings, Inc., Huntsman was required to sell its business associated with a product known as TR52 mainly sold into inks applications. Pro forma adjustment is to record a reduction to revenues, cost of goods sold and selling, general and administrative expenses related to the divestiture of Huntsman’s TR52 business. This divestiture excludes any associated manufacturing assets. |
|
|
|
|
|
(i) |
|
To record a reduction to depreciation expense related to the step-down in long-lived assets resulting from purchase accounting, assuming average estimated useful lives of 16 years. |
|
|
|
|
|
(j) |
|
To eliminate Rockwood acquisition expense. |
|
|
|
|
|
(k) |
|
To reclassify research and development expenses of the Titanium Dioxide Pigments and Other Businesses of Rockwood Holdings, Inc. from selling, general and administrative expenses to conform with Huntsman’s presentation. |
|
|
|
|
|
(l) |
|
To record interest expense on debt incurred in connection with the acquisition, assuming an interest rate of 3.75%. |
|
|
|
|
|
(m) |
|
To record an income tax benefit on pro forma adjustments. |